Tag Archives: spot trade

This morning 9:30am Singapore time was the Aussie CPI quarterly numbers. This time around, the CPI is important to support what is going on in the economy; rising real estate prices, rising food prices, rising wages. Forecasters was expecting 0.3% for the quarter.

I decided to place my straddle trade at 9:27am with the following details: –

As it turned out the CPI came in NEGATIVE at (0.2)%, it surprised me too!

Immediately the AUD tanked, triggering my Stop if Offered at 0.7728, the initial drop was 88bps down to 0.7670, then, it began to pick up more momentum. At about 1:42pm the spot level was at 0.7633 and I decided to square the position to lock in my trading profits of 95bps.

It’s 2:40pm Singapore time now, and the spot is at 0.7614.

So the total move from the spot at 0.7758 to now is 144bps! So you see, a significant data event and one that financial markets has been talking up to create volatility coming into the data, usually will react violently if the data was significantly different from expectations.

This afternoon is UK quarterly GDP, are we going to see any surprises. Lately, economic data coming out of the UK has been dismal except for the continuing rise in real estate prices.

The 4H + Fibo indicates that the current spot level is at the 50% level.

The 1H + Fibo indicates that the currenct spot level is at the 100% level.

So it looks like any negative surprise to the GDP data could easily cause the GBP to tank?!

The UK economy has been wavering back and forth with no strong solid trend. I felt that today’s UK Services PMI could be a telling sign as to where the economy will be heading and potentially a volatile data event.

So at about 4:25pm, I did a straddle trade with the following details: –

Stop if Bid: 1.5300

Spot: 1.5263

Stop if Offered: 1.5230

When the data came out at 4:30pm, it was weaker at 55.6 compared to expectations of 57.6, unfortunately, the the GBP didn’t really dip that much, it went to a low of 1.5238 and rebounded. It didn’t trigger my trade, so I decided to pull the trade out.

It’s now 9:20pm and the GBP is holding at 1.5264. So in hindsight it was prudent to pull out the trade, as nothing really happened going into early NY session.

I guess the world is more focused on tonight’s ECB and Mario Draghi!!!